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Sugarmade Inc. (SGMD) Entering Hemp CBD Extraction Equipment Market with Chinese Technological Backup

  • The rising global popularity of cannabidiol as a wellness product is leading market forecasts of revenues up to $22 billion by 2022 and $50 billion or more by the end of the next decade
  • The market optimism is fueling hopes for ancillary market players as well, such as hydroponics equipment supplier Sugarmade Inc.
  • Sugarmade announced this month that it will enter the hemp CBD extraction equipment market, drawing on access to advanced Chinese extraction technologies

The health and wellness market sector for cannabidiol (CBD) products continues to grow at such a pace that analysts at the Brightfield Group predict that revenues could reach $22 billion per year by 2022 and, per various Wall Street estimates, approach $50 billion or even $75 billion by 2029-30, as noted in a media report carried by Nasdaq (http://nnw.fm/Lev70).

The potency of CBD’s sales estimates are encouraging to Sugarmade Inc. (OTCQB: SGMD), which announced this month that it is expanding on its hydroponics supply model for the agriculture industry to enter the hemp extraction equipment and technologies market (http://nnw.fm/1qlSN). In addition to supplying “legacy extraction equipment to extraction companies,” Sugarmade plans to begin distribution of “next generation extraction technologies developed in the Chinese province of Yunnan where the hemp industry has existed for more than a thousand years,” CEO Jimmy Chan stated in a news release.

The proprietary Chinese technologies hold the promise of increasing the efficiency of production processes used in hemp cultivation and extraction – the primary source of CBD – at a time when hemp cultivation is enjoying a resurgent popularity in the United States in tandem with federal legalization under last year’s Farm Bill (http://nnw.fm/f6UJj).

“It is clear the 2019 and 2020 hemp cultivation seasons will be massive,” Chan added. “Our staff has done extensive research into the fast-growing hemp industry. We continue to see an imbalance between cultivation outputs and extraction capacities within the industry. This leads us to believe the market for extraction services and the equipment required by these extraction companies will continue to accelerate.”

The company cites U.S. Department of Agriculture forecasts anticipating that farm production will generally decrease nationwide, while hemp production is expected to defy the trend as states such as Kentucky, Colorado, Oregon and North Dakota report sizable increases in hemp acreage and applications to begin cultivating hemp. In April, Kentucky’s state agriculture commissioner told a CNBC news reporter that he expects the number of hemp acres in Kentucky to increase from 16,000 to 50,000 this year, with a corresponding increase in applications for hemp cultivation (http://nnw.fm/OCc4R).

Sugarmade has been building on an agreement with Kentucky-based hemp cultivator Hempistry Inc. to deliver resources for plant micropropagation work. Micropropagation involves cloning or “propagating” new hemp plants from existing “mother” plants that demonstrate superior qualities. A lot of North America’s hemp is grown using propagation techniques instead of by planting new seeds, which may carry greater risks of poor productivity. The propagation technique also allows the company to harvest a large number of plants simultaneously.

For more information, visit the company’s website at www.Sugarmade.com

NOTE TO INVESTORS: The latest news and updates relating to SGMD are available in the company’s newsroom at http://nnw.fm/SUGAR

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